Slides in this set

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OVERVIEWThe great economic crisis of 1929-33, which some would argue continued until1939, is the subject of massive controversy because of its initial causes and itlongevity.The number out of work leapt from 1.5 million to 12 million (24.9% in 1933)20% of all US banks failed.Unemployment did not return to the 1929 level until 1943.Great parts of the US economy, notably agriculture were over manned andeconomically rotten, an economic shake out was inevitable.To some, the Hoover administration did too little too late and to others he didtoo much, undermining business confidence.…read more

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Factors listed on specification: structural imbalances in the USA, weaknesses in USbanking system and lack of financial regulation by the federal government, problems of international trade (take extra care with these)…read more

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AGRICULTUREIn 1929, Farmers annual income stood at an average of $273, well belowthe national average of $750. In the 1920s, farmers did not share thesame boom.A bushel of wheat cost $2.19 in 1919 and b y 1922 had gone down to$0.90c.Natural disasters notably drought, also hit rural communities (Boll weevildisaster)Net farm income fell from $6.1 billion in 1929 to $2 billion in 1932.In Oklahoma, wheat harvest had an annual income of $1 millionproduced only $7,000 in 1933.The value of farmland dropped 30% between 1920 ­ 1929.…read more

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PROBLEMS IN INDUSTRYThere were depressed periods even in the early 1920s, industries such as coaland textiles began to decline due to overproduction and falling demand.Growing unemployment added to the problem as this had an impact onconsumer spending which was a vital factor in deepening the slump.In 1931, 15.9% of the workforce had lost their jobs, by 1933 this had risen to 25%and even those still at work were victims of declining income.In Detroit, Ford employed 120,000 workers in spring 1929 ­ but by 1931 thishad shrunk to 37,000Similarly General Electric's workforce had halves (88,000 ­ 41,000)It is clear that there was insufficient purchasing power in the economy to sustaingrowth in the 1920s particularly in consumer durables.2.2 million man days were lost in strikes in 1931. The automobile and electric manufacturing industries combines sales shrank over 2/3rds between 1929 ­ 1932…read more

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CONSUMER SPENDING By 1927, the majority of those who could afford to buy such consumer goods such as cars and radios had done so, and demand began to level off leading to a decline. At the end of the decade, approximately 16 million families, approximately 60% of the population were living below the line which it had been calculated was `sufficient to supply basic necessities'. If people were already starting to under consume, the banking crisis merely intensified this further. There was an overheated economy in which demand could not keep up with the goods being produced the 1920s created an unsustainable boom.The growth of huge corporations made smaller businesses face harder times and for every 4 businesses that succeeded, 3 failed…read more